Recent Blog Posts

  • 5 Steps to Get Out of Debt and STAY Out of Debt
    Yes, Dave Ramsey is absolutely right in suggesting that more Americans should eliminate all the debt in their lives…but all of it? My answer is emphatically – No! I believe that there are two types of debt: ‘Good debt’ and ‘Bad Debt’. One makes us money, while the other can destroy us financially, or at the least hold us back from our full financial potential and enjoying life. Thus, I believe we have to enter into some degree of ‘Good Debt’ in order to stay out of ‘Bad debt’. Yes…I know Dave Ramsey would call me crazy, but he’s not all knowing and omnipotent. Allow me to explain my point of view, which certainly includes a Debt Snowball and so much more!! Step 1: For now, at least make minimum payments on your credit cards. Don’t make your credit score worse by not making your payments on time, or worse ... Read more
  • A lesson we can all learn from Farmers: How do we prepare for the coming storms?
    The picture above is of the annual potato harvest that takes place all over eastern Idaho each year. So next time you walk into Five Guys for a burger, you can now see where those bags of potatoes are coming from…literally. Now us city slickers may yearn for a beautiful day in the outdoors getting our hands dirty with an honest day’s work, but it’s not that simple. As I’m sure you can imagine, farming, and even potato farms, come with a great deal of risk. So it is with our own business…right? It’s not always roses and buckets of profit year after year. There are risks and ups and downs in every business and industry. Well, I’ve learned a lot from farmers my whole life (my family has a heritage of farming), but since moving to Idaho, I’ve learned even more keenly the importance of harvesting and where to ... Read more
  • Using a Strategic and 10 Year Plan in your Business
    All too often I meet with clients that have grand ideas for investing, or other business projects for cash flow, but they don’t have a thorough and sensible plan to get there. I have found a two-part solution for myself and hundreds of clients over the years that has given me calm assurity I can reach my goals: A 10 Year Plan, and A Dynamic Strategic Plan Now, this process or my request of you may seem a little overwhelming or complicated at first, but the beauty of having a small business is that you can be agile and quick to change the course of your ship. You can make executive decisions and implement them rather quickly. Large companies can’t do this. You are the captain of your ship and generally don’t have to answer to anyone (except perhaps your family, your backers/investors, or banker), and you can make things ... Read more
  • How Many Properties Should I Put in My LLC?
    Every week, if not every DAY, one of the attorneys in my office is asked this question in a consultation. We take this seriously and want to give them the answer that is in THEIR BEST interest, which means an LLC for every rental probably isn’t necessary. It’s an issue of quality NOT quantity. Meaning, how much equity is in the property or LLC? Not, how many properties are IN the LLC. A lot of workshop gurus and ‘coaches’ working out of cubicles in Nevada (supposedly under the guidance of an attorney) will recommend an LLC for EVERY rental.  I truly believe that an LLC for every rental property isn’t needed for the far majority of real estate investors.  It’s expensive, cumbersome and provides nominal benefit when there’s not a lot of equity in their rentals….yet!! Is there a limit on how many properties you can put in an LLC? ... Read more
  • Two Reasons to Put Your Spouse on Payroll before Year-End
    This is a very important question and something we often analyze for clients in our office. In fact, many clients rush to put their spouse on payroll, but for the wrong reasons and it could actually be a costly mistake.  First, here are two big reasons NOT to put your spouse on payroll. These are actually common mistakes or misconceptions on why one may put cut the non-working spouse a check.  So the non-working spouse can contribute to an IRA – Wrong. A non-working spouse does not have to have a ‘paycheck’ in order to contribute to a traditional or Roth IRA. The non-working spouse can create what’s called a Spousal IRA. There are really only two requirements. One, the working spouse has eligible compensation that’s at least as much as the total contribution to the both IRAs; and two, they file a joint income-tax return. Bottom line, don’t ... Read more
  • The Hidden Power and Benefits of a College Education IRA
    Ok…so the real name of an IRA that can be used for education expenses is called a Coverdell Education Savings Account (Coverdell ESA).  However, for simplicity sake, we in the accounting world generally refer to these powerful little gems as the “Education IRA”. Regrettably, not everyone in the accounting world believes the Education IRA to be a precious gem.  Mostly because they don’t understand their hidden benefit and strategy.  Thus, in my opinion, the 529 college savings plans are oversold to the public and no one really talks about the Education IRA. Let me set the record straight and share what I think to be one of the most incredible ways to save for college education. First, the good news: Think of a Coverdell ESA as simply an IRA…any investments inside the IRA grow tax free and come out tax free for any qualified education expenses (typically tuition, books, fees, ... Read more
  • Is Redeeming Airline Miles Taxable?
    The IRS has been wanting to tax the redemption of airline miles or credit card points for years, and although they haven’t succeeded yet, there are still strategies to be aware of. Some common examples of credit card rewards that do not need to be reported as income are cash-back programs, travel miles bonuses, accumulated points towards future purchases, and credit card sign-up bonuses that require a financial transaction, such as making a purchase, to be realized. The IRS considers the redemption of these rewards a “discount” or a “rebate” on those purchases, instead of income to be taxed – how altruistic of them! Now for the bad news – that “free” bonus or reward that you got just for signing up probably isn’t tax free. Why? Because unlike with rewards that you earn as you make purchases when you get a bonus just for signing up, or switching cards, ... Read more
  • What is a COPE for Asset Protection?
    A Charging Order Protection Entity (COPE) is a unique type of entity that can provide additional protection for the assets it holds from the owner’s personal liabilities. It is far more advanced and complex than the average LLC. The COPE is generally structured as a Limited Liability Company (LLC) and state legislatures around the country have created these types of entities to help potential debtors and cause problems for creditors seizing and selling their assets. This entity’s goal is to protect what’s inside the COPE LLC, not just provide the typical LLC benefit of protecting the outside owners and managers from the operations of the LLC. For example, let’s assume you are in a car accident caused by your texting and driving. As such, you might be facing a major liability, but with a COPE LLC holding your assets, it would generally be difficult for the creditor to get ‘into’ ... Read more
  • Maintaining Your S-Corporation
    I wish that it was as easy as just filing a form with the State and you have magical tax savings and bullet-proof asset protection, but that’s simply not the case.  Operating your business in the S-Corporation format can provide some amazing benefits, but if we don’t take care of the basics it could cause a lot of unexpected problems. The reality is that the tasks can be easy and fairly affordable.  Here are the items to check off on your “to-do list” when it comes to maintaining your entity and you’ll truly reap some tax benefits and have a serious level of asset protection. Here is your ‘to-do-list of 7 things to be aware of if you want to PROPERLY maintain your S-Corp: 1. Annual Maintenance- It’s easy and affordable to simply make sure you hold your annual Shareholder and Director meetings.  If you haven’t done your ‘Minutes’ ... Read more
  • How to Find the Best Rental Property this Year!
    I meet one on one with at least 1,000 clients a year to discuss their business ventures, tax planning and most importantly their rental properties.  Inevitably, we are going to talk about wealth building and rental property is going to be critical to the discussion.  Every year I learn more and more from my clients regarding what is working and what isn’t.  I truly am the lucky one!! As your attorney and CPA I need to speak up!!  I need to share these common themes and strategies that my successful clients are using to buy rentals.  I’m not a realtor, I’m not a broker…but I am an investor, I too own rental property, and am consistently looking for rentals and study all I can on the topic.  Please accept my humble opinion on 6 strategies that can help you find the ‘best rental property’ you can this year. 1. Buy ... Read more
  • The Perils of Investing with Friends, Family and Church Members
    Every week our firm gets call from clients around the country who have lost money by investing with friends, family or neighbors they trusted—but who were not licensed to sell securities or did not properly document the relationship as a partnership. Many of these new clients have given someone a short-term, high-interest loan with a promissory note that has not been repaid. Others have invested money with someone who claimed to be achieving spectacular returns from investing in real estate, commodities, or foreign currency. Some invested into these ‘projects’ directly out of their retirement plan and wonder if now ‘all is lost’. Nearly in every case there is a guarantee of unusually high returns with no risk, and of course, they have never missed a payment. However, by the time they call our office, the money is gone, their calls are being ignored and they want legal advice on what ... Read more
  • Why Buy Your Parent’s Home and Rent it Back to Them
    Believe it or not, it could actually be a really smart move to buy your parent’s home and rent it back to them. In fact, there are several ways to handle a parent’s home depending on their particular health or financial situation. But a bare minimum, even if you don’t use a sale/leaseback strategy your parents should have a Revocable Living Trust to ensure the orderly and effectively transfer of the home to the family and avoid probate in states where the expense can be significant.   However, some of you may have alternative goals and purchasing the home to rent back to your parents could be a wise strategy.  With a simple transaction, your parents could gain immediate access to their home equity, stay in the home, and you’d pick up some generous new tax deductions.  Here is a summary of a few other hidden benefits: Access to Cash.  ... Read more
  • Ways to Succeed at Tackling Student Debt
    Student loans cause a great deal of stress in the lives of many Americans. From keeping track of payment deadlines or living in constant fear of not being able to make their next payment; the whole process can be overwhelming. Bottom line, even if you are making payments chipping away at your student debt, it can often be a never-ending and unforgiving process. Surprisingly, 1 in 6 adult Americans have some form of Student debt. But what’s even more shocking, is that that many of these same debtors didn’t know that in 2007, Congress created a program called “Public Service Loan Forgiveness”. Essentially, under this program, if a debtor is willing to work for 10 years in the public sector working for example a government agency, or a non-profit organization, then the debt is completely forgiven. The debtor still needs to make the minimum payments each month during the 10 ... Read more
  • Practical Checkbook Procedures for your Business to Succeed
    As we have been working through tax returns for clients this tax season, it’s alarming to see how many clients aren’t maintaining their checkbook properly, or not even having a separate checkbook at all for each of the companies they own and operate. I’m not just talking about a tax savings strategy… I’m also talking about saving you from a potential lawsuit and also losing your sanity. It’s critical that each company a business owner forms has a separate checkbook for several reasons. Let me suggest five reasons that could truly prove invaluable. Corporate Veil. First and foremost, maintaining a separate checkbook substantiates the “corporate veil”, one of the primary reasons for forming a new company. Having a separate checkbook shows that the owner recognizes the company is a separate and distinct entity and hopefully encourages the owner to not “co-mingle” personal and business funds. Tax Savings. Second, a ... Read more
  • Your Business is Never Too Small to Consider an Employee Handbook
    Having an Employee Handbook can make a huge difference in deterring a future lawsuit with employees.  It can also help you tremendously in creating a more positive work atmosphere and increasing efficiencies.  A properly drafted Handbook sets forth the guidelines, expectations and most importantly the policies of your business. When employees know exactly what is expected of them it reduces their stress and allows them to better focus on their duties.  It also removes questions and concerns about the grey areas of vacations, time off, dress code, benefits, and a whole host of other important topics that need to have clarity in a business. We’ve felt for years, that there are 3 primary reasons to create a quality Employee Handbook, and then review and maintain it on a regular basis. Increased Productivity. In fact an Employee Handbook can be even more important for a small business than a large corporation. ... Read more